What are the current trends on the Russian pharmaceutical market? How can you use them to adapt and strengthen your business in an ever-changing environment?

We’ve compiled a brief overview of the Russian pharmaceutical market in 2019 to give you a clearer picture of what’s been happening and what’s to come in the near future.

Increased market volume amid declining sales dynamics

In 2018, Russia’s pharmaceutical market amounted to 1,682bn roubles ($25bn), a year-on-year rise of 2.6%. Growth has continued into 2019, with a 0.6% year-on-year rise over the first six months – a total of 489bn roubles ($7.4bn) of medicine was sold.

These are certainly positive figures and profits are growing from year to year. However, growth in monetary terms fell by about 1% in 2018 due to a drop in purchasing power of the population and the resulting drop in medicine consumption.

Russia’s commercial pharmaceutical market

The leading sector of Russia’s pharmaceutical market has traditionally been the commercial sector, of which the high price category (over 500 roubles) leads the field - in June sales in this sector accounted for 44.6% of the market in monetary terms. Medicines in the mid-range category (150-500 roubles) accounted for 39.9%, and the lower categories (from 50 to 150) - 11.0% and (up to 50 roubles) - 4.5%.

Russian-produced medicines are in the highest demand due to their lower prices, accounting for 60.5% of sales, but in monetary terms they occupy only 28.1%.

Prescription medicines account for 35.4% of the market share, while over-the-counter medicines - 65.4%. Both categories have approximately the same monetary values.

Key market impact initiatives

Last year, a decision was finally made on the ongoing issue of introducing the sale of medicines in supermarkets and other retail shops. The initiative will not be going ahead due to issues of quality control and advising customers. The exclusive right to trade in medicines remains with pharmacies.

This decision has led to retail chains inviting more pharmacies to open on their premises, Azbuka Vkusa for example has begun cooperating with MarathonPharma and Doctor Stoletov. Such steps increase the availability of medicines and therefore increase profits.

Another major change to the market is the law to introduce the sale of medicines online, expected in the near future. Currently, consumers can only pre-order medicines to be delivered to a pharmacy for payment and collection.

Online sales with home delivery will significantly increase the availability of medicines, especially for those with limited mobility. It’s also expected that sales will grow among other categories of the population due to the convenience. A trial launch of the bill may take place in January 2020, but changes and amendments are still being made.

The main concern about online medicine sales is the risk of selling fake products. However, from 1 January 2020 a law on the compulsory labelling of medicines, designed to strengthen the quality control of pharmaceutical products on the market, comes into force. Manufacturers will be required to apply complex crypto-labelling on the packaging, eliminating the possibility of counterfeiting.

An important government decision recently has been to reduce the price of vital and essential medicines. Throughout 2019-2020, all medicines in this category will have to undergo mandatory re-registration of their maximum selling prices.

Despite many of these initiatives involve additional costs from manufacturers, the laws will streamline business on the market, ensure the affordability of medicines, and increase the quality of regulation and compliance of medicines with approved standards. These factors are expected to lead to a strengthening of the market and an increase in sales volumes.

Development of the Pharma-2030 strategy

The Ministry of Industry and Trade is currently developing the national Pharma-2030 strategy, to develop and expand the basic ideas in the previous Pharma-2020 strategy and to introduce further incentives from the Russian government to develop the sector.

The main points of the new strategy will be provisions aimed at the growth and strengthening of domestic production of medicines, the scientific, technological and socially-oriented development of the industry, and the increase in life expectancy of the population.

Pharma-2030 stipulates the introduction of the latest technologies for manufacturing of key medicines, integrating automated systems, as well as increasing the interaction between manufacturing and scientific and educational organisations.

Boost your presence on the Russian market at Pharmtech & Ingredients 2019

More than ever, companies need to keep their finger on the pulse of the market to maintain their position. Pharmtech & Ingredients is Russia’s leading industry event bringing together manufacturers and suppliers with industry professionals keen to source the latest developments.

The exhibition is your chance to promote your brand and products, meet future clients and partners, and stay up-to-date on industry developments.

Join the industry’s leading companies this November at Moscow’s Crocus Expo. ENQUIRE TO EXHIBIT